A perfect storm for social care

Should we, the general public, have to pay so much towards our care in our old age after paying our taxes all our lives? If we don’t pay, who should pay? Should we pay more, or less in the future? If the standard of services providing care and the availability of care is not what it should be, how should this be improved?

Should insurance play a part? It did some years ago before insurers, providing pre-funding insurance policies, pulled out of the market due to difficulties in predicting their potential liabilities.

The Dilnot Report made a whole host of proposals which have not been taken up so far. These could have helped the insurance industry innovate.

In an ‘ideal world’… This phrase usually suggests that it would be nice to do something but we cannot afford it. Or rather, we would like to spend your/our money elsewhere.

Some issues should simply be beyond economics and politics. With such issues, we should make the changes necessary to put things right and worry about how you are going to pay for it later.

The recent example of this would be the Grenfell tragedy. Safety concerns were pointed out by residents long before the fire and it is looking increasingly likely that economics played a part in the decisions not to address them at that time. This is a clear example showing that some things should be dealt with as soon as any problems are highlighted.

Social care is another political football in which the political parties take turns being the football. When one party tries to address the issue, or make excuses for not addressing an issue, they get kicked by the opposition parties, other groups and the general population. It has become an increasingly sensitive subject that clearly needs to be properly addressed.

I know personally from a number of recent experiences that social care is not what it should be. That is not to say that those employed in the sector don’t do a magnificent job, but some care homes are unacceptable and there are not enough people to provide the right level of attention to the residents.

Recently, there has been a lot of news about social care standards and funding. The Care Quality Commission (the NHS and care regulator in England) highlighted several examples of care and nursing homes where its inspectors found particularly poor care. It rated them all as providing “inadequate” care.

Prior to that, the Conservative party manifesto suggested an extension to what the individual had to pay to cover the costs of social care in their home. There was a bit of a climb down on this as Theresa May suggested a cap. She said that people needing social care at home would have to pay for it until the value of their assets – including their home – reached a floor of £100,000. The party also promised that a family home would never need to be sold in a person’s lifetime, with costs instead recouped after death.

However, the policy caused anger because payments after death could eat into the inheritance of offspring whose parents were unlucky enough to suffer from a condition – like dementia – in which reliance on social care is inevitable.

The phrase “dementia tax” was used by Labour but also by newspapers supportive of May to highlight the idea that someone suffering from Alzheimer’s, which means heavy reliance on social care, would be less able to pass on their home to their children than someone with an NHS-treated condition such as cancer.

Despite May’s claim that the ‘basic principles’ of the policy were the same, the Tories had previously briefed that their policy was, “fairer and more equitable than the current system and the cap recommended by the Dilnot report.”

The health secretary, Jeremy Hunt, was asked on the BBC Radio 4 Today programme if the policy was a rejection of both Dilnot’s cap and the £72,000 limit that was going to be put in place by the Conservatives under David Cameron.

In an article published in 2012 following The Dilnot Report, the Nuffield Trust commented that “the Government spends some £140 billion a year on services for older people. The bulk of this pays for pensions and other welfare benefits, and NHS care. Just six per cent goes towards meeting the social care needs of older people.”

The Government and we as a country do not spend enough on social care for our elderly. There is no question that we as individuals should contribute to our social care, and those that try to deprive themselves of their assets in order to avoid paying for their own care should consider that decision from a social responsibility point of view.

A system which caps our contribution, leaving us with at least a legacy to leave to our families significantly higher than the current £14,000 should be an aim.

The insurance & pensions industries need to get their act together in order to introduce insurance products that people can contribute to throughout their working lives.

This issue needs sorting as a matter of urgency. No more smoke and mirrors.

Beyond politics, there are a number of facts to consider:

· We have an ageing population

· People are living longer and are frail for longer

· Social care is not funded through the NHS

· The NHS and social care provision are underfunded

· Many care workers receive the minimum wage or not much more

· Many care homes are owned and run by the private sector

· The country has a huge ‘National Debt’

· The UK’s income is substantially lower than its outgoings (the deficit)

According to an article in the Daily Telegraph published on the 24th April 2017, the Government borrowed £52bn in the last financial year, a fall of £20bn compared to the year before, as the long struggle to eliminate the deficit moved closer towards its goal. That amounts to 2.pc of GDP, the lowest level of borrowing since 2007-08, on the eve of the financial crisis.

However, as the UK economy is bigger now, the number is still substantially larger in cash terms – the deficit nine years ago stood at £40.4bn. That ballooned as the recession struck, spiralling up to £151.7bn in 2009-10 – equivalent to 9.pc of GDP – before slowly falling as the Government has battled to control borrowing. The same article tells us that the National Debt was £2.05 trillion including bailouts.

Contact Us

Company registration number 7509349. Company registered in England and Wales. Registered office: The Old Bank, 77 Railway Rd, Brinscall, PR6 8RJ. “The information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.” Banks Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. Banks Wealth Management LTD is entered on the FCA register (www.fca.org.uk/register) under reference 729590.